© Martin Poole / Global Look Press
According to a document leaked online, China's internet-finance regulator has recommended that local governments squeeze bitcoin miners out of the country through electricity pricing, taxation, property law and environmental regulations.
Until now, Chinese miners have capitalized on cheap, coal-fired electricity in regions such as Xinjiang and Inner Mongolia. The document calls for monthly reports on remaining bitcoin-mining operations in each region.
"Currently, there are some so-called 'mining' enterprises that produce 'virtual currencies.' They have consumed huge amounts of resources and stoked speculation of 'virtual currencies,'" states the document, which is dated January 2. It is purportedly from the Leading Group of Internet Financial Risks Remediation - the internet-finance regulator in China - and was cited by Quartz.
The news is likely to trigger an immediate dip in bitcoin mining, which could create a shortage that would have a knock-on effect on prices, potentially leading to yet another price spike. The shift to more globally distributed mining operations may also drastically influence peak times for transactions, with a corresponding hike in transaction fees likely until the industry adjusts to the new dynamic.
China was once a driving force behind cryptocurrency mining, and accounted for more than two-thirds of the world's bitcoin-mining operations until recently. The Chinese government previously banned initial coin offerings and halted trading of virtual currencies on local exchanges for a period in 2017.
Bitmain, which controls China's two largest bitcoin-mining pools, is setting up headquarters in Singapore, and has launched mining operations in the US and Canada, according to the company's co-founder Wu Jihan, as quoted by Bloomberg. BTC.Top, the third-biggest player in the Chinese bitcoin-mining scene is reportedly also opening a facility in Canada, while ViaBTC - number four in the rankings - has already started operations in Iceland and the US.
Transactions involving cryptocurrencies will not be significantly affected. However, the exodus of miners to locations as disparate as Iceland and Iran, or Canada and Russia, may potentially challenge the sector, which relies on energy-intensive computer networks to enable buying and selling.
"We chose Canada because of the relatively cheap cost, and the stability of the country and policies," Jiang Zhuoer, founder of BTC.Top, said in an interview with Bloomberg.
The REAL BTC threat is that it BYPASSES THE banking system ! It is not that the banks will collapse and people will withdraw their money from the banks – and take a red eye to BTC ! That also,is not likely in the short term.
The threat is that trade and commerce will BYPASS THE BANKING SYSTEM !
If A sells to B in POS store or online or by a wire transfer – the money goes to his bank – irrespective of FX chosen.Cash can be hoarded,of course, but up to a limit
Once the money hits the banks – then the trail is set ! EVEN IF THE PAYER IS NOT TRACEABLE – the recipient is screwed .Besides FATF – he comes in the Direct and Indirect tax net ! It is this tax net which feeds the corrupt government and politicians.
So in a trade through BTC or other CrC (Crypto Coin),the Govtt loses the entire revenue on that supply chain and value chain – FOREVER – and that will catalyse more and more of such trades.In fact it will start a BTC supply chain – with its tech platforms – wherein manufacturing upto a limit – will NOT PAY ANY TAXES TO the government.
The advantage to the buyer of the goods is that ,he get the items free of VAT or taxes – so it is 10-20 % cheaper,and he has anonymity of payment (if not of purchase)
AND THEN,THIS WILL BANKRUPT THE STATE AND THE BANKS (AS ALL THIS LIQUIDITY WILL EXIT THE BANKS AND WILL ALSO DESTROY BANK SOLVENCY AND THE MONETARY POLICY OF THE FED -AS INTEREST RATES AND CREDIT POLICY,WILL NO LONGER BE A LEVER FOR ANY ECONOMIC DECISIONS AND OUTCOMES !
That is the EXISTENTIAL THREAT TO THE WORLD AND ESPECIALLY TO THE «USA».
Take the case for India – the Bad assets are USD 400 Billion USD and COVID has aided the banks in hiding more !
It is CERTAIN THAT THE GOI WILL DEMONETISE BANK DEPOSITS ACROSS THE BOARD TO OFFSET THE LOAN LOSSES !
Y WILL PEOPLE PUT MONEY IN BANKS ? The same is the story in most parts of the world.
BTC supply comes from LOW COST POWER NATIONSBTC demand comes from INEVITABLE DEMAND WHICH IS EXPECTED from BUSTED NATIONS LIKE INDIA – AND SPECUALTORS IN THE US/EU PUNTING ON ITBTC THREAT COMES FROM THE USA and -EU – the existential threat ! BTC is not a threat to PRC !
AND THAT IS WHAT MAKES IT A PERFECT INVESTMENT BET ! dindooohindoo
COULD IT BE THAT THE US AND EU ARE USING BTC TO TRAP INVESTORS,INFLATE THE BALLOON AND THEN BLOW IT UP ? THAT WILL WIPE OUT THE SPECULATIVE LIQUIDITY IN THE ECONOMIES – AND THE WEST CAN DO A FALSE FLAG – LINK THE MONEY TO CRYPTOS – AND THEN USE THAT TO BLOW IT UP !